Focus turns to details in budget battle

By Andy Sullivan

WASHINGTON (Reuters) – Though lawmakers have tentatively agreed to the largest domestic spending reduction in U.S. history, they now must delve into the details to decide which programs to cut to meet their $33 billion target.

One day after Republican and Democratic leaders agreed on the outlines of a budget deal that could avert a government shutdown, they jockeyed on Thursday to protect areas where they fear it will do the most harm.

“What we cut is much more important than how we cut,” Senate Democratic Leader Harry Reid said.

The deal would settle a months-long battle over government spending and provide a final funding structure for the current fiscal year, which is already halfway over.

As staffers met to work out the details, several hundred anti-spending Tea Party activists rallied outside the Capitol to urge Republicans to defend cuts.

“Grow a spine — no compromise,” read a hand-written sign held by Helene Kerns of West Virginia.

The talks could still fall apart, but neither party is eager to cause a government shutdown that could lead to thousands of layoffs when voters are nervous about the shaky economic recovery and rising gas prices brought on by unrest in the Middle East.

A $33 billion cut would represent a big victory for Republicans, as Obama had initially proposed a budget that would have increased spending by $41 billion.

A cut of that size could mean severe pain for many domestic agencies but would do little to plug a budget deficit that is projected to hit $1.4 trillion this year.

House Speaker John Boehner cautioned that the final size of the spending cut could change, as negotiators must resolve whether to include funding restrictions that would prevent President Barack Obama from pursuing some of his top priorities.

Republicans could push for a higher total figure in return for dropping some of those restrictions, which would prevent Obama from implementing his signature healthcare reform and block greenhouse gas regulations.


Boehner must also sell the deal to newly elected rank-and-file Republicans who have shown little appetite for compromise after winning office on a vow to slash spending.

Boehner encouraged the lawmakers, many of whom are affiliated with the grassroots Tea Party movement, to keep the pressure on Democrats.

“The more heat we put on them, the more leverage I’ve got,” Boehner said.

Several freshmen said they were reluctant to back the deal.

“It’s going to be tough for me to vote for that, I can tell you,” Republican Representative Stephen Fincher said.

Republicans will get additional opportunities in the coming months as Congress faces a vote to raise the $14.3 trillion debt ceiling and begins work on a budget for the next fiscal year, which starts on October 1.

All 47 Senate Republicans unveiled a measure that would amend the U.S. Constitution to require a balanced federal budget each year. It stands little chance of becoming law but could provide leverage in upcoming budget fights.

The government has been operating on a temporary extension of last year’s budget for the past six months, but that arrangement expires on April 8. Congress must pass any agreement before then.

Republicans hope the final deal reflects as much as possible their original spending package, which would cut $61 billion and impose dozens of restrictions on how the administration spends that money.

It imposes immediate cuts averaging 25 percent on nearly every aspect of the government’s nonmilitary operations, from food-safety inspections to nuclear weapons monitoring.

Tax collectors warn that cuts to their enforcement operations could cost the nation $4 billion in lost revenue.

Many of those restrictions are unacceptable to Obama and his fellow Democrats, though some will likely make it into the final bill.

The Republican plan includes relatively minor restrictions that, for example, block assistance to mohair farmers.

Obama wants education, scientific research and other programs that lead to long-term economic growth to be spared.

On Thursday, Reid said the plan should spare the Head Start preschool program, which would face a 28 percent cut under the Republican plan. Advocates say that would cut off aid to 200,000 children.

Senator Scott Brown, one of a handful of moderate Republicans who often determine whether legislation can pass or fail, said the agreement should not cut housing and heating assistance for poor people.

Democrats hope to steer some cuts toward programs like crop subsidies and transportation projects that normally lie beyond the reach of the annual budget process. Republicans suspect those cuts may amount to budget gimmickry that will not lead to actual savings.

(Additional reporting by Thomas Ferraro, Richard Cowan, Caren Bohan and Alister Bull; Editing by Cynthia Osterman)

Focus turns to details in budget battle